The Australian High Court has been holding hearings as to whether or not to uphold Australia’s new cigarette plain packaging law. Major tobacco companies, including Philip Morris, Imperial Tobacco Australia, British American Tobacco, and Japan Tobacco International, have challenged the law’s constitutionality, arguing that the law will allow the Australian government to illegally acquire valuable intellectual property. If the law is upheld, the government will require all cigarettes to be sold in the same drab olive packaging plastered with graphic images that portraying the health risks of smoking.

The law effectively bans cigarette companies from putting their brands and trademarks on cigarette packages. Instead all cigarette sold in the country will have the same standard packet; the only distinguishable markers between cigarette brands will be the product’s name. But even that will be regulated, with all brand names appearing in the same standard colour, position, font, size, and style.

The tobacco industry claims by banning them from placing their brand and trademarks on cigarette packages, the Australian government has illegally acquired their intellectual property and undermined their ability to legitimately do business, and has done so without just compensation. The law is furthermore expected to significantly cut the industry’s revenues in Australia.

However, a High Court decision over the packaging laws is expected to arrive relatively quickly according to Professor Gillian Triggs at Sydney Law School. The tobacco companies, she explains, will argue that they are entitled to just compensation because their property will be taken away. Just compensation in a situation where one’s property is taken away is a provision in the Australian constitution very similar to the Fifth Amendment in the United States, although it is interpreted very differently in Australia. When the ‘taking of property’ does not benefit the government, it is not considered an acquisition under Article 51(xxxi) of the Australian Constitution. Since the taking of the tobacco companies’ intellectual property does not benefit the Australian government, the law is expected to be upheld.

But the international response and ramifications of the law are also important. The court case has been closely watched around the world, with many viewing it as a test case for similar legislation in other countries. The New Zealand government has expressed interest in implementing similar laws, with Canada and Great Britain also interested in similar legislation. In fact, the British health secretary says that the recent push for cigarette plain packaging in Australia has inspired the United Kingdom to develop similar laws.

But while the Australian plain packaging law has been supported by some countries, it has been opposed by others in the international community. Honduras and Ukraine have both officially requested consultations on the law at the World Trade Organization (WTO). Honduras, which is a major producer of tobacco products, has signalled that it will be supporting the tobacco industry by challenging such laws at the WTO.

It is perhaps Ukrainian support of the tobacco companies in Australia that goes to show the amount of political heft the tobacco industry has. Ukraine, a country with no tobacco trade with Australia, has challenged the law at the WTO. Ukraine has complained that the law is, “... more trade restrictive than necessary to achieve the state health objectives”.

The question before the WTO is whether or not the legislation deprives intellectual property with trade rules between countries. For instance, Professor Trigss says that another international concern about Australia’s plain packaging law is its relation to a Bi-Lateral Investment Treaty between Hong Kong and Australia, which also protects intellectual property rights.

Ultimately, it will be up to the Australia to not only defend its law to a domestic audience, but also to demonstrate to the international community that the law is needed.